What are the three types of Surplus Lines risks?

Surplus lines insurance specifically addresses risks that are not readily available in the admitted insurance market. The classification of these risks typically includes categories such as distressed, unique, and high capacity.

Distressed risks are those that present a higher likelihood of loss or require specialized underwriting due to previous claims history or adverse issues that make them less desirable to traditional insurers. Unique risks refer to those that are not standard in nature, often involving unconventional features or coverage needs that are not typically addressed by standard policies. High capacity risks involve exposures that require substantial coverage amounts often above the limits of standard insurers, necessitating surplus lines solutions to provide the necessary coverage.

This triad of classification effectively encapsulates the differences in risk nature and the need for alternative coverage solutions, distinguishing it from the other incorrect options that do not encapsulate the essential traits and requirements that characterize surplus lines insurance.